April 2010

Pigs might fry!

17 April 2010
There's a curious proverb, the provenance of which I am not sure (and I promise I didn't make up), that goes: "A pig on credit makes a good winter but a bad spring." Portugal, Italy, Greece and Spain - whose deliciously un-PC acronym is often considered somewhat objectionable - now, collectively, seem to be casting sensibility aside and going full-tilt towards living up to their PIGS tag. But we at last have a deal brokered in respect of Greece, so as FX&MM Editor Drew Hillier muses, we can look forward to a surge of confidence in the markets and a rally in the euro....err not quite.

Credit ratings and the currency markets

17 April 2010
Over twelve months since Spain saw its triple-A credit rating stripped by Standard & Poor's, who then turned its guns on Portugal, and then more recently had a further go at Greece, debate has intensified about the impact and influence exerted by credit ratings agencies and the numerous channels through which capital account restrictions may affect economic activity. Drew Hillier looks at how such decisions weigh on the currency markets, and, furthermore, in terms of corporate activity, the potential risks that may arise in terms of currency mismatch if firms without foreign currency earnings increase their foreign currency debt leverage.

In from the cold

17 April 2010
In the aftermath of the financial crisis the regulatory spotlight has been turned firmly on over-the-counter derivatives, primarily for the lack of transparency in bilaterally traded contracts and over concerns that credit risk has not been properly priced and collateralised. For FX&MM, Frances Maguire reports.

OTC derivatives management expert Q&A

17 April 2010
Gerrard Mahony, Business Development Director at riskart, talks to FX&MM about the impact that incoming regulation for standardised contracts might have on the OTC market and what is already being done in terms of pricing, internal processes and collateralisation.

Getting up to speed

17 April 2010
Speaking to FX&MM's Frances Maguire, Philippe Chambadal, CEO of SmartStream Technologies discusses the industry-wide need for managing trades and liquidity intra-day. If the tumult of the past two years has taught banks anything, it is that they need to have transparent, real-time operations. There was a time when such ‘back office' issues were deemed an afterthought. Not so anymore. The crisis simply highlighted the high level of trade breaks, and the failures in managing operational risk.

Treasury: reality bites

17 April 2010
Figures released by the U.S. treasury show the country's budget deficit hit a record $221bn in February - the largest monthly deficit in its history - the total deficit since the beginning of the fiscal year in October now stands at $651.6bn. An interesting backdrop, then, against which to set the EuroFinance International Cash and Treasury Management conference, taking place in Miami from the 5-7 May.

Complying with Liquidity Risk Requirements

17 April 2010
FinArch is a market leader in integrated Risk and Finance solutions for the finance industry. Here, the firm's Head of Risk and Capital Management, Nancy Masschelein, and Chief Commercial Officer, Nigel Lee, answer your questions on ensuring a sound liquidity risk framework.

Partnering up

17 April 2010
Using conversion engines and attaining reachability for SEPA payments may well work for the short-term but, as Frances Maguire finds, attaining a longer-term solution for the new SEPA payments standard will come through partnering and collaboration. In its 2009 Annual Report, the European Payments Council (EPC) says that whilst banks are "gradually" starting to deliver SEPA Direct Debit services to their customers, it welcomes the fact that EU finance ministers recognise that setting a deadline for migration to SEPA would provide the clarity and the incentive needed by the market. EPC chairman, Gerard Hartsink, says: "Mandating an EU-wide end date requires EU legislation."

Walker: better policing is the key

17 April 2010
Ben Blackett-Ord is a director of Bovill, a financial services regulatory consultancy which he established in 1999. He is an experienced financial services regulatory practitioner having served as a regulator, compliance officer and consultant for over twenty years. Here, Blackett-Ord - in bringing us up to date with the Walker Review - looks at Sir David Walker's final recommendations, published in November last year, which provide a thorough analysis of the workings of bank boards in the run up to the banking crisis. If the recommendations are fully adopted, bank corporate governance may be about to change for ever. Or will it? Walker points the finger not only at bank boards but also at institutional shareholders for failing to hold bank boards to account.

Time to think small!

17 April 2010
Copenhagen's failure to deliver a legally binding deal has created an opportunity for individuals to fill the void left by politicians. So says Sir David King, Director of the Smith School of Enterprise and the Environment at the University of Oxford, and a National Endowment for Science, Technology and the Arts (NESTA) visiting Fellow. He was the Chief Scientific Adviser to H.M. Government under both Tony Blair and Gordon Brown, and Head of the Government Office for Science between 2000 and 2007. In that time, he raised the profile of the need for governments to act on climate change and was instrumental in creating the new £1 billion Energy Technologies Institute. Here, Sir David explains to FX&MM how small-scale projects can move the world towards a low carbon future.